Children's
Health Insurance Program (CHIP)
Fraud, Medicare Fraud, and Medicaid Fraud are on the rise as
many dental clinics, dentists, dental groups, dental
companies, and other health care providers seek increase
their profits by committing fraud against government.
Through CHIP dental coverage fraud, Medicaid dental
fraud, and Medicare dental work fraud, some dentists,
dental groups, and dental companies are making huge
profits at the expense of taxpayers. As such, it is important that
CHIP Fraud Whistleblowers, Dentist Medicaid Fraud
Whistleblower, and Dentist Medicare Whistleblowers come
forward and blow the whistle on Dentists that are
committing Medicaid fraud and Medicare fraud.
If you are aware of Dentist CHIP Fraud,
Dentist Medicaid Fraud,
Dentist Medicare Fraud, or other CHIP fraud or government fraud and are
the original source with special
knowledge and evidence of the fraud and want to be a whistleblower and
an American Hero, please feel free to
contact
Dentist CHIP Fraud Whistleblower Fraud Lawyer
Jason Coomer via
e-mail message or use our
submission form to contact us about a potential
Dentist CHIP Fraud Qui Tam False
Claim Whistleblower
lawsuit, Dentist Medicaid Fraud or Medicare Fraud
lawsuit, Dental Clinic CHIP Fraud or Medicaid
Fraud lawsuit,
or other CHIP Fraud, Medicaid
Fraud, or Medicare Fraud lawsuit.
Children's Health Insurance Program (CHIP) Fraud
Lawsuits, Dentist CHIP Fraud Lawsuits, Dentist Medicaid Fraud Lawsuits, and Dentist Office
CHIP FRAUD Qui Tam Whistleblower Lawsuits
As the Children's Health Insurance
Program (CHIP) formerly known as the State Children's
Health Insurance Program (SCHIP) continues to expand and
provide more dental and health services to children,
dental CHIP fraud and medical CHIP fraud are becoming
more common. Some medical doctors, dentists,
health care companies, medical clinics, hospitals, home
health care companies, dental clinics, and other dental
and health care providers have found that it is more
profitable to commit fraud regarding treatments they
provide than it is to practice medicine or dentistry.
The Children's Health Insurance
Program (CHIP) is a program administered by the United
States Department of Health and Human Services that
provides matching funds to states for health insurance
to families with children. The program was
designed with the intent to cover uninsured children in
families with incomes that are modest but too high to
qualify for Medicaid. This program includes both
medical coverage and dental coverage.
At its creation in 1997, State
Children's Health Insurance Program (SCHIP) was the
largest expansion of taxpayer-funded health insurance
coverage for children in the U.S. since Medicaid began
in the 1960s. The statutory authority for State
Children's Health Insurance Program (SCHIP) is under
title XXI of the Social Security Act. States were given
flexibility in designing their State Children's Health
Insurance Program (SCHIP) eligibility requirements and
policies within broad federal guidelines. Some states
have received authority through waivers of statutory
provisions to use State Children's Health Insurance
Program (SCHIP) funds to cover the parents of children
receiving benefits from both SCHIP and Medicaid,
pregnant women, and other adults. SCHIP covered 6.6
million children and 670,000 adults at some point during
Federal fiscal year 2006, and every state has an
approved plan.
The budget for the Children's Health
Insurance Program (CHIP) has continued to rise creating
an environment for large dental clinics, large medical
clinics, corporate "for profit" medicine, and corporate
"for profit" dentistry to create mass service dental and
medical clinics with large billing departments and
complicated billing where CHIP fraud, Medicaid
fraud, and Medicare fraud can flourish and create large
profits.
CHIP Dental Coverage Benefit Lawsuits, Medicaid Dental
Coverage Benefit Lawsuits, Medicaid Fraud
Unnecessary Dental Work Fraud Lawsuits, CHIP Dental
Upcoding Fraud, and Dentist Office Fraud Whistleblower Lawsuits
Children's Health Insurance Program
(CHIP) dental coverage includes benefits for
preventative treatment and therapeutic treatment.
CHIP Dental Coverage for Preventive Services include
routine check-ups, routine cleanings, x-rays, and
sealants to prevent decay. Preventative services
have a $175 maximum for a 12-month period. All children
receive the same amount of preventative services.
CHIP Dental Coverage for Therapeutic Services including
fillings, extractions (tooth removal), crowns/caps, and
root canals. CHIP Dental Coverage therapeutic
services are based on a three-tier program. The higher
the tier, the higher the maximum allowable amount for
therapeutic services. The child’s tier level depends on
many factors, such as renewing on time, the amount of
time a child as been enrolled in CHIP and recent gaps in
coverage. In addition to the normal Dental
Coverage for children in CHIP, there are extra bonus
dental benefits for parents that timely renew there
child’s CHIP coverage.
CHIP offers three tiers or levels of
therapeutic or corrective coverage. A child’s dental
benefit increases when their coverage is renewed and a
CHIP enrollment fee is paid on time. The tier level is
based on the number of years a child has had CHIP
coverage. Children new to CHIP start at Tier I, children
who have had coverage 2 years can get Tier II dental
coverage and children with CHIP three years can get Tier
III coverage. For all children in CHIP there is a $250
maximum benefit for preventive services like checkups
and cleanings. The benefit levels in each Tier are: Tier
I: Preventive services plus up to $285 of annual
therapeutic services. Tier II: Preventive services plus
up to $425 of annual therapeutic services. Tier III:
Preventive services plus up to $565 of annual
therapeutic services.
Though CHIP provides medical care and
dental care for many children that would have to go
without. Some corporate wrongdoers have found that
they can exploit the CHIP dental coverage by providing
unnecessary dental services, upcoding the services that
are actually provided, and billing for services that
have not been provided. These fraudulent CHIP
billing practices can be the basis for CHIP fraud
lawsuits.
CHIP Fraud Whistleblower Lawsuits, Medicaid
Dental Billing Fraud Whistleblower Lawsuits, Dentist
CHIP Fraud Whistleblower Lawsuits, and Dental Medicare
Billing Fraud Whistleblower Lawsuits (Whistleblowers
that are the first to file with Specialized Knowledge)
Dentist Whistleblowers, Dentist
Office Manager Whistleblowers, Pediatric Dentist
Whistleblowers, CEO Whistleblowers, CFO Whistleblowers,
Benefit Coordinator Whistleblowers, Book Keeper
Whistleblowers, Qualified Dental Assistant
Whistleblowers, Registered Dental Assistant
Whistleblowers, and Certified Dental Assistant
Whistleblowers are stepping up and exposing CHIP fraud,
Dental Medicaid Billing Fraud and Dentist Medicare
Billing Fraud that is costing taxpayers ten of millions
of dollars. The economic incentive for these Dentist
Whistleblowers, Dentist Office Manager Whistleblowers,
Pediatric Dentist Whistleblowers, CEO Whistleblowers,
CFO Whistleblowers, Benefit Coordinator Whistleblowers,
Book Keeper Whistleblowers, Qualified Dental Assistant
Whistleblowers, Registered Dental Assistant
Whistleblowers, and Certified Dental Assistant
Whistleblowers is that if they are an original source
with special knowledge of fraud and are the first to
file, they receive a portion of the money that the
government recovers. Depending on the extent of the
fraud, qui tam recoveries for the government can be in
the ten of millions of dollars and whistleblower
recoveries can be in the millions of dollars.
There are several keys to a
successful False Claims Act Qui Tam Whistleblower action
including 1) obtaining original and specialized
information of the fraud, 2) being the first to file
regarding the specific fraud, and 3) protecting the
whistleblower for retaliation.
Original and Specialized Information of Fraud
is Essential for Pharmaceutical Representative
Whistleblower Lawsuits, Medical Device Sales
Representative Whistleblower Lawsuits, Drug Marketing
Whistleblower Lawsuits, and Medicare Marketing Fraud
Lawsuits
As insiders it is common for Dentist
Whistleblowers, Dentist Office Manager Whistleblowers,
Pediatric Dentist Whistleblowers, CEO Whistleblowers,
CFO Whistleblowers, Benefit Coordinator Whistleblowers,
Book Keeper Whistleblowers, Qualified Dental Assistant
Whistleblowers, Registered Dental Assistant
Whistleblowers, and Certified Dental Assistant
Whistleblowers, and other Dental Clinic executives to
have specialized knowledge of CHIP fraud, Medicaid
Billing Fraud, and fraudulent billing schemes. As such,
it is important for the Dentist Whistleblowers, Dentist
Office Manager Whistleblowers, Pediatric Dentist
Whistleblowers, CEO Whistleblowers, CFO Whistleblowers,
Benefit Coordinator Whistleblowers, Book Keeper
Whistleblowers, Qualified Dental Assistant
Whistleblowers, Registered Dental Assistant
Whistleblowers, and Certified Dental Assistant
Whistleblowers to obtain and preserve evidence of the
CHIP fraud, Medicare dentist billing fraud, and Medicaid
dental billing fraud. Whether this evidence is in
e-mail messages, billing records, memos, marketing
plans, marketing materials, recordings, or other
documents, it is important for the whistleblower to have
evidence of the fraud. It is also often helpful to have
fellow whistleblowers that can help build the CHIP
fraud, Medicare dental billing fraud, or Medicaid
dentist fraud case.
Being the First to File on the Fraud is
Essential for Recovery Under the False Claims Act and
can Prevent Potential Criminal Liability in Dentist
Medicare Billing Fraud, Dentist Medicaid Billing Fraud,
Dental CHIP Fraud, and other Medicare Fraud, Medicare
Fraud, & CHIP Fraud Lawsuits
It is also essential to not delay in
coming forward with a False Claim Act Qui Tam Action as
the first whistleblower to file is eligible to be a
relator and make a large recovery for exposing the
fraud. Additionally, when the fraudulent scheme is
exposed, the people that kept the fraud secret can
sometimes be found liable for criminal activity for not
exposing the fraud that was being committed and further
be held liable for continuing criminal activity.
Several Dentists, Dental Management
Companies, Dental Clinics, and Dentist Office
Professionals, have been the subject of Dentist Medicaid
Fraud Whistleblower Lawsuits and Government crackdowns
on Dental Medicaid Fraud and Dental Medicare Fraud.
These Dental Medicaid Fraud Whistleblower Lawsuits,
Dentist Medicare Fraud Whistleblower Lawsuits, and
government crackdowns have uncovered unnecessary dental
treatments, dentist Medicaid fraud, Medicaid fraud
kickbacks, dental Medicare fraud, and other dental
Medicaid fraud that were endangering children and
costing taxpayers millions of dollars.
National Dental Management
Company Pays $24 Million to Resolve Fraud Allegations
Medically Unnecessary Dental Services Allegedly
Performed on Children
WASHINGTON - The United States today
announced that it has settled False Claims Act
allegations against FORBA Holdings LLC, a dental
management company that provides business management and
administrative services to 69 clinics nationwide known
as "Small Smiles Centers." Under the agreement, FORBA
will pay the United States and participating states $24
million, plus interest, to resolve allegations that it
caused bills to be submitted to state Medicaid programs
for medically unnecessary dental services performed on
children insured by Medicaid, which is funded jointly by
the federal and state governments. FORBA has further
agreed to put in place various remedial measures
designed to prevent similar unlawful conduct from
occurring in the future. The government’s investigation
of individual dentists is ongoing, and FORBA is
cooperating with that investigation by providing
information about dentists who may have violated
professional standards.
The United States alleged that FORBA
was liable for causing the submission of claims for
reimbursement for a wide range of dental services
provided to low-income children that were either
medically unnecessary or performed in a manner that
failed to meet professionally-recognized standards of
care. These services included performing pulpotomies
(baby root canals), placing crowns, administering
anesthesia (including nitrous oxide), performing
extractions, and providing fillings and/or sealants.
"We have zero tolerance for those who
break the law to exploit needy children," said Tony
West, Assistant Attorney General for the Civil Division
of the Department of Justice. "Illegal conduct like this
endangers a child’s well-being, distorts the judgments
of health care professionals, and puts corporate profits
ahead of patient safety."
Assistant Attorney General West
praised the collaborative efforts of the federal and
state agencies that made this result possible. The
Justice Department’s Civil Division and the U.S.
Attorneys’ Offices for the District of Maryland, the
Western District of Virginia, the District of South
Carolina, and the District of Colorado handled these
cases. The Civil Division led the nationwide
investigation, which was conducted by the Office of
Inspector General for the Department of Health and Human
Services, the Federal Bureau of Investigation, and the
National Association of Medicaid Fraud Control Units.
To resolve the allegations against
it, FORBA will pay $24 million, plus interest. The
federal share of the civil settlement is $14,285,645,
and the states’ Medicaid share is $9,714,355.25. In
addition, as part of the settlement, FORBA has agreed to
enter into an expansive five-year Corporate Integrity
Agreement with the Office of Inspector General of the
Department of Health and Human Services. The agreement
provides for procedures and reviews to be put in place
to avoid and promptly detect conduct similar to that
which gave rise to this matter. Specifically, FORBA must
engage external reviewers to monitor its quality of care
and reimbursement processes. In addition, the chief
dental officer must develop and implement policies and
procedures to ensure that the Small Smiles clinics
provide services consistent with professionally
recognized standards of care. FORBA has also agreed to
cooperate in the government’s continuing investigation
of individual dentists.
"We will not tolerate Medicaid
providers who prey on vulnerable children and seek
unjust enrichment at taxpayers’ expense," said Daniel R.
Levinson, Inspector General of the U.S. Department of
Health and Human Services. "This settlement reaffirms
our commitment to protect the health and well-being of
Medicaid beneficiaries and to ensure the integrity of
this essential health care program."
"Health care providers must be held
accountable when they mistreat patients and overcharge
insurers," said Rod J. Rosenstein, U.S. Attorney for the
District of Maryland. "We are committed to using our
affirmative civil enforcement authority to protect
patients from inadequate care and protect governmental
health coverage programs from fraudulent charges."
The government’s investigation was
initiated by three lawsuits filed under the qui tam, or
whistleblower, provisions of the False Claims Act, which
permit private citizens to sue on behalf of the United
States and share in any recovery. These actions are
pending in the U.S. District Courts for the District of
Maryland, the Western District of Virginia, and the
District of South Carolina. As part of today’s
resolution, the three whistleblowers will receive
payments totaling more than $2.4 million from the
federal share of the settlement.
"In this case, FORBA put greed and
profits before the well-being of children," said Timothy
J. Heaphy, U.S. Attorney for the Western District of
Virginia. "It endangered the health and safety of
innocent children and defrauded the taxpayer of millions
of dollars. Today’s settlement addresses these egregious
acts and sends a clear message that Medicaid fraud will
be expeditiously addressed by this Department."
This settlement with FORBA is part of
the government’s emphasis on combating health care
fraud. One of the most powerful tools in that effort is
the False Claims Act, which the Department of Justice
has used to recover approximately $2.2 billion since
January 2009 in cases involving fraud against federal
health care programs. The Justice Department’s total
recoveries in False Claims Act cases since January 2009
have topped $3 billion.
LOCAL DENTIST AND ORTHODONIST
WIFE CHARGED WITH DEFRAUDING MEDICAID
(LAREDO, Texas) - A federal
indictment charging a Laredo dentist and his
orthodontist wife with 17 counts of health care fraud
has been unsealed, United States Attorney Tim Johnson
and Texas Attorney General Greg Abbott announced today.
Both defendants, who were arrested yesterday without
incident, appeared before United States Magistrate Judge
Diana Saldana today. During that hearing the issue of
bond was raised. The court has taken the matter under
advisement and the defendants were ordered to remain in
custody pending her decision.
Carlos Armin Morales-Ryan, 33, and
his wife, Nelia Patricia Garcia-Morales, 30, are the
owners and operators of Orthogenesis International
Centre, a Laredo dentistry and orthodontics business.
The indictment alleges that from January 2005 to at
least July 2008, the defendants fraudulently submitted
claims to the Texas Medicaid program for payment for
dental and orthodontic services they did not and could
not have rendered because they were not in their
offices, in the state of Texas or in the continental
United States on the dates and times claimed. Physical
presence of the provider is a prerequisite under
applicable Texas law and Medicaid regulations for a
claim to be submitted and paid for services rendered to
a Medicaid beneficiary. The defendants are accused of
executing the scheme and defrauding the Medicaid program
of a total of $768,215.
Texas Medicaid is a health care
program funded in part by the federal government through
payroll taxes and in part by the State of Texas.
Each count of health care fraud
carries a maximum sentence of 10 years imprisonment
without parole and a maximum fine of $250,000 upon
conviction.
The investigation leading to the
charges was jointly conducted by the FBI, Department of
Health and Human Services Office of the Inspector
General and the Texas Attorney General Medicaid Fraud
Control Unit. The case is being prosecuted by Assistant
United States Attorneys Don J. Young and Michael Elliot.
FEDERAL GRAND JURY CHARGES
BROWNWOOD, TEXAS, DENTIST IN HEALTH CARE FRAUD CASE
LUBBOCK, Texas — James Crow, 65, of
Brownwood, Texas, has been indicted by a federal grand
jury in Lubbock on numerous felony offenses involving
health care fraud, announced U.S. Attorney James T.
Jacks of the Northern District of Texas. Crow, who
practices general dentistry in Brownwood, is charged
with six counts of false statements involving a health
care matter and 18 counts of health care fraud. It is
expected that Crow will make his initial appearance in
federal court in Lubbock later this month.
The indictment alleges that from
January 2004 through December 2007, Crow, a dentist
enrolled with Medicaid, filed, and caused to be filed,
Medicaid claims for payment of services that he did not
render and for payment of services that were billed with
improper billing codes. The indictment alleges Crow
billed Medicaid for numerous resin-based composites
restorations (cavity fillings), when in fact, either no
such fillings were performed, or he instead performed
other dental services reimbursed at lower rates.
An indictment is an accusation by a
federal grand jury, and a defendant is entitled to the
presumption of innocence unless proven guilty. However,
if convicted, each false statement count carries a
maximum statutory sentence of five years in prison and a
$250,000 fine. Each of the health care fraud counts
carries a maximum statutory sentence of 10 years in
prison and a $250,000 fine. In addition, the indictment
includes a forfeiture allegation which will require
Crow, if convicted, to forfeit a money judgment of the
gross proceeds, obtained directly or indirectly, as a
result of the offense, of at least $1 million,
The case is being investigated by the
Texas Medicaid Fraud Control Unit and the FBI. Assistant
U.S. Attorneys Amy Burch and Denise Williams of the U.S.
Attorney’s Office in Lubbock are in charge of the
prosecution.
Heartland Dental To Pay $3
Million In Civil Settlement Includes $1.3 Million for
DEA Registration Violations
APR 14 -- (Springfield, IL) - An
Illinois company that manages dental practices in 12
states and its chief executive officer have agreed to a
$3 settlement million to the United Stated and Illinois
under terms of two settlement agreements. Heartland
Dental, Incorporated, which is headquartered in
Effingham, Illinois, and Richard E. Workman, Heartland’s
CEO, have agreed to pay $1,650,000 to resolve
allegations of improper billing to Illinois Medicaid. In
a related settlement, Heartland Dental will pay the U.
S. $1,350,000 to resolve allegations that newly hired
dentists issued prescriptions prior to registration with
the DEA as a means to generate revenue for Heartland.
The $1.3 million settlement will
resolve allegations that Heartland Dental allowed newly
hired dentists to use the DEA resigration number of
other Heartland dentists to issue prescriptions. Under
the Controlled Substances Act, a DEA registration number
allows healthcare providers, including dentists, to
distribute and prescribe controlled substances. The
allegation that Heartland misused DEA registration
numbers resulted in pharmacies unwittingly submitting
claims to Medicaid for invalid prescriptions. There were
no allegations the prescriptions at issue were not
otherwise medically necessary or that any patients were
injured as a result of the prescriptions.
“We take seriously the abuse and
misuse of DEA registration numbers in the prescribing of
controlled substances,” stated Gary G. Olenkiewicz,
Special Agent in Charge of DEA’s Chicago Field Division.
“The DEA appreciates our law
enforcement partnership and commitment with the FBI,
Illinois State Police, the Illinois Attorney General’s
Office, U.S. Dept of Health and Human Services and the
United States Attorney’s Office that made this a
successful investigation.”
Under terms of a five-year consent
decree with DEA, Heartland Dental is prohibited from
violating the Controlled Substances Act and agrees to
permit DEA investigators to conduct administrative
inspections as necessary to confirm compliance with the
act without requiring the investigators to obtain
administrative inspections warrants.
In addition to the DEA violations,
under terms of the settlements, while denying the
allegations and legal claims, Heartland resolves
allegations that from August 1999 through October 2005,
it falsely billed Illinois Medicaid for certain
procedures: submitting claims for crown buildups,
non-covered services, as restorations and claims for
surgical extractions which were or should have been
simple extractions.
U.S. Attorney for the Central
District of Illinois, Rodger A. Heaton stated, “This
multi-million dollar settlement is the latest successful
result by our outstanding health care fraud team. We
remain committed to work together with our partners to
recover monies that have been improperly diverted from
Medicare and Medicaid, and where appropriate, seek
criminal and civil penalties for those who benefit from
the unlawful diversion.”
According to FBI Special Agent in
Charge Karen E. Spangenberg, health care fraud
investigations are among the highest priority
investigations within the FBI’s White Collar Crime
Program. The FBI conducts between 2,000 and 3,000 new
health care fraud investigations each year, by using
resources in both the private and public arenas, through
partnerships with various federal state and local
agencies.
Heartland Dental will pay $1.65
million to the U.S. and Illinois related to a “whistle
blower” qui tam lawsuit filed in 2003 by Lori Jamison
under the federal False Claims Act and Illinois’
Whistleblower Reward and Protection Act. These acts
permit private citizens to bring lawsuits on behalf of
the United States or the State of Illinois and receive a
portion of the employee proceeds of any settlement or
judgment awarded against a defendant. Ms. Jamison, a
former employee of one of Heartland’s predecessor
entities, will receive $412,500 as her share of the
settlement. Heartland has further agreed to pay Jamison
an additional $325,000 for dismissal of additional
claims, including expenses, attorney’s fees and related
costs.
The investigation and negotiations
with Heartland Dental were conducted by the U.S.
Attorney’s Office for the Central District of Illinois,
the Drug Enforcement Administration, the Office of the
Inspector General of the U.S. Department of Health and
Human Services, the Illinois State Police Medicaid Fraud
Control Unit, the Illinois Attorney General’s Office,
and the Federal Bureau of Investigation.
North Carolina Dental Services
Chain Pays $10 Million to Resolve False Claims
Allegations
WASHINGTON – Medicaid Dental Center (MDC),
a privately-owned chain of dental clinics in North
Carolina previously known as Smile Starters and Carolina
Dental Center, has reached a settlement with the United
States and North Carolina to resolve False Claims Act
allegations, the Justice Department announced today.
Under the agreement, MDC agreed to pay $10,050,000 to
resolve allegations that it caused false or fraudulent
claims for payment to be presented to the North Carolina
Medicaid program by billing for medically unnecessary
dental services performed on indigent children.
The United States and the state of
North Carolina alleged that MDC and its ownership,
including Michael A. DeRose , DDS, P.A., and Letitia L.
Ballance, DDS, were liable under the False Claims Act
for submitting claims for reimbursement for performing
pulpotomies that were not medically necessary.
Pulpotomies are considered medically necessary in
pediatric dental cases when an infection in a tooth
spreads into the pulp chamber of the tooth, requiring
the pulp’s removal. This procedure is often referred to
as a “baby root canal.”
MDC and its ownership also were
alleged to have submitted claims for reimbursement for
placing stainless steel crowns that were not medically
necessary and for failing to obtain informed consent for
all medical procedures and services. The settlement is
limited to claims submitted to the North Carolina
Medicaid program and does not involve any other states.
“These dentists subjected their child
patients to invasive and sometimes painful procedures,
often for the sake of obtaining money from the North
Carolina Medicaid program,” said Jeffrey S. Bucholtz,
the acting Assistant Attorney General for the
Department’s Civil Division.
Both Dr. DeRose and Dr. Ballance have
been disciplined by the North Carolina Board of Dental
Examiners. Both entered into consent orders with the
Board on December 8, 2005. Under the terms of these
consent orders, each of the dentists agreed not to
contest allegations that dentists employed and trained
by MDC performed excessive treatment on seven of MDC’s
pediatric patients by performing pulpotomies and placing
stainless steel crowns when they were not warranted or
supported by x-rays or appropriate diagnostic
documentation. As part of today’s settlement, the Office
of Inspector General for the U.S. Department of Health
and Human Services has expressly reserved its exclusion
authority against MDC and Drs. DeRose and Ballance.
“Health care professionals who abuse
their positions and engage in excessive treatment
regimens and excessive billing practices will not be
tolerated,” said Gretchen C.F. Shappert, U.S. Attorney
for the Western District of North Carolina. “The North
Carolina Medicaid Program was not created for
self-enrichment. It is a public trust. Individuals who
use their professional skills to take advantage of that
trust will be investigated and held to account for their
actions.”
“This settlement with the Medicaid
Dental Center demonstrates the commitment of the Office
of Inspector General and our law enforcement partners to
protect our Nation’s children,” said Daniel R. Levinson,
Inspector General of the U.S. Department of Health and
Human Services. “The Medicaid program is intended to
assist the most vulnerable Americans and to help ensure
that they receive necessary health services, not to
unjustly enrich others at the expense of indigent
persons.”
The investigation and settlement of
the case was conducted by the U.S. Attorney’s Office for
the Western District of North Carolina and the
Department’s Civil Division, along with the Federal
Bureau of Investigation, the U.S. Postal Service’s
Office of Postal Inspection, the Department of Health
and Human Services Office of Inspector General, and the
North Carolina Attorney General’s Medicaid Fraud
Investigations Unit.
Dentist Medicaid Fraud Lawsuits, Dental Medicaid Fraud
Lawsuits, Medicaid Fraud Dentist Office Federal False Claims Act Whistleblower Lawsuits,
Unnecessary Dental Work Medicaid Fraud, Dental
Upcoding Medicaid Fraud, and Dentist Office Qui Tam Whistleblower Lawsuits
Dentists, Dental
Clinics, Dentist Groups, and other health care
professionals that take Medicaid and Medicare payments
including Federal Medicaid Benefits and State Medicaid
Benefits are becoming more common. These Dental
and Orthodontic Groups take payments from federal and
state funded programs for providing basic dental
services to individuals and families. However, in
order to increase profits some of these dental clinics,
dental groups, orthodontists, dentists, and orthodontic
groups provide false billing statements to the
government including double billing, triple billing,
billing for services not provided, upcoding, or billing
for unnecessary services. This billing fraud is
dental Medicaid Billing Fraud, orthodontic Medicaid
Billing Fraud, dental Medicare Billing Fraud, and
orthodontic Medicare Billing Fraud.
It is important for families with
children needing dental care or orthodontic care to be
able to obtain these services as well as elderly people
to be able to obtain dental care and orthodontic care,
but it is also important that health care fraud
including Medicare Fraud and Medicaid Fraud are stopped.
Dental Medicaid Fraud Whistleblowers, Dentist Medicare
Fraud Whistleblowers, Orthodontist Medicaid Fraud
Whistleblowers, Orthodontic Medicaid Fraud
Whistleblowers, and other Medicare Fraud and Medicaid
Fraud Whistleblowers are an essential necessary part of
identifying and stopping health care fraud.
Dentist Medicaid Fraud Lawsuits, Dental Clinic
Medicaid Fraud Lawsuits, Orthodontist Medicaid Billing
Fraud Lawsuits, Double Billing Medicaid Fraud and
Unnecessary Dental Work Medicaid Fraud Lawsuits, Dental
Upcoding Medicaid Fraud Lawsuits, and Dentist Qui Tam Whistleblower Lawsuits
As Medicaid and Medicare spending
increases, some health care providers including dentists
and orthodontists are making false claims for services
including billing for services not provided, upcoding
services, double billing, and providing unnecessary
services. As such, it is important for Dentists,
Orthodontists, Dentist Office Managers,
Orthodontics Office Managers, Medicaid Billing Clerks,
Medicaid Coders, and other Dental Professionals to
become Medicaid whistleblowers to seek compensation on the
government's behalf from companies and people that have
defrauded taxpayers out of government money. Qui
Tam Dental Medicaid Fraud
Whistleblower Lawyer Jason Coomer helps Medicaid Fraud whistleblowers
and Medicare Fraud Whistleblowers
determine if they may have a viable Dental Medicaid
Fraud lawsuit, Orthodontics Medicaid Fraud lawsuit,
Dentist Medicare Fraud Lawsuit, or Orthodontic Medicaid
Fraud lawsuit.
Lawmaker arrested in Medicaid fraud scheme
By Christopher Sherman
ASSOCIATED PRESS
Published: 10:58 p.m. Wednesday, June 23, 2010
"MCALLEN — Federal marshals on
Wednesday arrested a state representative who was one of
four South Texas dentists indicted on federal charges of
taking kickbacks for Medicaid referrals."
"Prosecutors accuse Schwarz of paying
15 percent kickbacks to dentists who sent him Medicaid
patients, then billed Medicaid for services that never
happened or for services performed by unlicensed
employees."
Medicaid Billing Fraud Lawsuits, Medicare
Billing Fraud Lawsuits, and the Increase in Medicare and
Medicaid Spending
Medicaid is a public health care
problem in the United States that provides health care,
dental care, and orthodontic care for eligible
individuals and families with low incomes and resources.
The Medicaid Program is jointly funded by state and
federal governments, but is managed by the states.
Medicaid is the largest source of funding for medical
and health-related services for people with limited
income in the United States and the Medicaid program has
been increasing. The fastest growing aspect of
Medicaid is nursing home coverage and this is expected
to continue as the Baby Boomer generation begins to
reach nursing home age.
Unlike Medicare, which is solely a
federal program, Medicaid is a joint federal-state
program. Each state operates its own Medicaid system.
Each state's Medicaid Program must conform to federal
guidelines in order for the state to receive matching
funds and grants. For many states Medicaid has
become a major budget issue as on average the state's
matching costs of the Medicaid program is about 16.8% of
state general funds. According to CMS, the Medicaid
program provided health care services to more than 46.0
million people in 2001. In 2008, Medicaid provided
health coverage and services to approximately 49 million
low-income children, pregnant women, elderly persons,
and disabled individuals. Federal Medicaid outlays were
estimated to be $204 billion in 2008. Medicaid
payments currently assist nearly 60 percent of all
nursing home residents and about 37 percent of all
childbirths in the United States. The Federal Government
pays on average 57 percent of Medicaid expenses.
Texas Dentist Medicaid Fraud Lawsuits, Texas Dental
Medicaid Fraud Lawsuits, Texas Orthodontist Medicaid
Billing Fraud Lawsuits, South Texas Medicaid Orthodontic
Group Medicaid Billing Fraud, South Texas Medicaid
Billing Fraud Whistleblower Lawsuits, Texas Medicaid
Fraud Double Billing Lawsuits, Texas Unnecessary Dental
Work Medicaid Fraud, South Texas Dental Upcoding
Medicaid Fraud Lawsuits, and Dentist Office Qui Tam Whistleblower Lawsuits
The Medicaid program in Texas spend
about $10 Billion annually on providing health care
benefits to the poor. The Texas Medicaid program
includes dental work including check ups, fillings, and
braces. Of the Medicaid services provided, it is
thought that there is an increasing amount of Medicaid
Billing Fraud that could be costing tax payers hundreds
of millions of dollars each year.
As such, it is vitally important for
Texas Medicaid Fraud Whistleblowers to step up and blow
the whistle on Medicaid Billing Fraud. Texas
Medicaid Whistleblowers, Texas Orthodontic Medicaid
Fraud Whistleblowers, and Texas Dentist Medicaid Billing
Fraud Whistleblowers need to step up and blow the
whistle to stop this Medicaid Fraud. By filing
Texas Dentist Medicaid Fraud Lawsuits, Texas Dental
Medicaid Fraud Lawsuits, Texas Orthodontist Medicaid
Billing Fraud Lawsuits, South Texas Medicaid Orthodontic
Group Medicaid Billing Fraud, South Texas Medicaid
Billing Fraud Whistleblower Lawsuits, Texas Medicaid
Fraud Double Billing Lawsuits, Texas Unnecessary Dental
Work Medicaid Fraud, South Texas Dental Upcoding
Medicaid Fraud Lawsuits, and Dentist Office Qui Tam
Whistleblower Lawsuits, Texas Whistleblowers can save
the Texas and the United States hundreds of millions of
dollars and may be able to recover tens of millions of
dollars themselves if they are successful relators.
The Increase in Government Health Care Spending
including Medicare Spending, VA Spending, Tricare
Spending, and Medicaid Spending is creating More Health
Care Fraud, Medicare Fraud, Medicaid Fraud, and VA
Medical Fraud and the need for more Medicaid Billing
Fraud Whistleblower Lawsuits, Medicare Billing Fraud
Whistleblower Lawsuits, and other Health Care Fraud
Whistleblower Lawsuits
The United States government as well
as several state governments are stepping up efforts to
crackdown on Health Care Fraud, Medicare Fraud, and
Medicaid Fraud that are costing taxpayers hundreds of
billions of dollars. These efforts include
encouraging Medicaid Fraud Whistleblowers and Medicare
Fraud Whistleblowers to come forward as well as setting
up task forces that are taking down criminals that are
involved in Medicaid Fraud and Medicare Fraud.
Health Care Fraud costs United States
Tax Payers approximately $90 billion each year through
Medicare, Medicaid, and other government health care
programs. Because the Medicare budget, the
Medicaid Budget, the VA Budget, the TRICARE Budget,
Medicaid Fraud, and Medicare Fraud are continuing to
increase each year, it is vitally important that
Medicare
Fraud Whistleblowers,
Medicare Fraud
Upcoding Fraud Whistleblowers,
Medicare Medicaid Fraud Hospital Whistleblowers,
Hospice Medicare Fraud Whistleblowers, and
Medicare Medicaid Fraud Nursing Home Whistleblowers
continue to step forward and blow the whistle on health
care fraud.
For more information on Medicare
Fraud and Medicaid Fraud, please go to the following
pages on Health Care Fraud, Medicare Fraud, and Medicaid
Fraud
Health Care Fraud and Abuse Control Program Report
and
Medicaid Fraud Interagency Coordination Report shows
that tens of millions of dollars of Medicaid over
payments are made each year. These overpayments
are often the results of double billing, false billing,
upcoding, and other types of Medicaid Fraud that costs
Tax Payers significant amounts of money.
Medicare is Different from Medicaid, but both
Medicare Billing Fraud Whistleblowers and Medicaid
Billing Fraud Whistleblowers are needed to File Medical
Billing Fraud Lawsuits
In 2009, the Medicare program covered
an estimated 45 million persons and this number is
expected to grow as about 7,000 people a day are
reaching retirement age. As millions of people are
added to the Medicare budget each year, the cost of the
Medicare budget is expected to grow.
The Medicare program consists of four distinct parts which are
funded differently:
-
Part A (Hospital Insurance, or HI)
covers inpatient hospital services, skilled nursing
care, and home health and hospice care. The HI trust
fund is mainly funded by a dedicated payroll tax of 2.9%
of earnings, shared equally between employers and
workers.
-
Part B (Supplementary Medical
Insurance, or SMI) covers physician services, outpatient
services, and home health and preventive services. The
SMI trust fund is funded through beneficiary premiums
(set at 25% of estimated program costs for the aged) and
general revenues (the remaining amount, approximately
75%).
-
Part C (Medicare Advantage, or MA) is
a private plan option for beneficiaries that covers all
Part A and B services, except hospice. Individuals
choosing to enroll in Part C must also enroll in Part B.
Part C is funded through the HI and SMI trust funds.
-
Part D covers prescription drug
benefits. Funding is included in the SMI trust fund and
is financed through beneficiary premiums (about 25%) and
general revenues (about 75%).[27]
Spending on Medicare and Medicaid is
projected to grow dramatically in coming decades. While
the same demographic trends that affect Social Security
also affect Medicare, rapidly rising medical prices
appear to be a more important cause of projected
spending increases.
Economic Incentives for Whistleblowers
Lawsuits, Government Fraud Lawsuits, and Qui Tam Lawsuits
When a government imposes a
penalty, for the doing or not doing an act, and
gives that penalty in part to whistleblowers that
will sue for the same, and the other part of the
recovery goes to the government, and makes it
recoverable by action, such actions are called "qui
tam actions", the plaintiff is suing on their own
behalf as well for the government and taxpayers.
Qui tam provisions of the False
Claims Act are based on the theory that one of the
least expensive and most effective means of
preventing frauds on taxpayers and the government is
to make the perpetrators of government fraud liable
to actions by private persons acting under the
strong stimulus of personal ill will or the hope of
gain.
The strong public policy behind
creating an economic gain for whistleblowers is that
the government would be significantly less likely to
learn of the allegations of fraud, but for persons
in certain positions with specialized knowledge of
fraud that has been committed. Congress has made it
clear that creating this economic incentive is
beneficial not only for the government, taxpayers,
and the realtor, but is an efficient method of
regulating government to prevent fraud and
fraudulent schemes.
The central purpose of the qui
tam provisions of the False Claims Act is to set up
incentives to supplement government regulation and
enforcement by encouraging whistleblowers with
specialized knowledge of fraud going on in the
government to blow the whistle on the crime.
The whistleblower's share of
recovery is a maximum of 30 percent and the
government's prior knowledge of fraud now does not
necessarily bar a whistleblower from collecting lost
revenue. If the government takes over the
lawsuit, the relator can "continue as a party to the
action." The defendant is also required to pay for
the relator's attorney fees. The whistleblower is
also protected from retaliatory actions by his or
her employer. As a result a 1986 amendment to the
False Claims Act, qui tam lawsuits have increased
dramatically. Though the amendment was first made
for corrupt defense contractors, the amendment has
uncovered billions of dollars in health care fraud
and will probably apply to fraudulently obtained
TARP and Bail Out Funds.
Dentist Medicaid Fraud Lawsuits, Dentist Office
Medicaid Fraud Whistleblower Lawsuits,
Dentist Unnecessary Work Medicaid Fraud Lawsuits, Medicare Upcoding
Fraud Lawsuits, Dental Upcoding Medicaid Fraud, Dentist
Double Billing
Medicaid Fraud Lawsuits, and Dentist Office Qui Tam Whistleblower Lawsuits
In the Supreme Court of the
United States, UNIVERSITY OF MEDICINE AND DENTISTRY
OF NEW JERSEY, ET AL., PETITIONERS v. DARA CORRIGAN,
ACTING INSPECTOR GENERAL, DEPARTMENT OF HEALTH AND
HUMAN SERVICES ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS FOR THE THIRD
CIRCUIT, BRIEF FOR THE RESPONDENT IN OPPOSITION
THEODORE B. OLSON Solicitor
General Counsel of Record PETER D. KEISLER Assistant
Attorney General MICHAEL S. RAAB DOUGLAS
HALLWARD-DRIEMEIER Attorneys Department of Justice
Washington, D.C. 20530-0001 (202) 514-2217
QUESTIONS PRESENTED
1. Whether the Inspector General
Act prohibits the Inspector General of the
Department of Health and Human Services from
conducting an audit or investigation of potential
fraud or abuse by a Medicare provider absent a
referral from the providers' Medicare carrier or
other particularized evidence of fraud.
2. Whether the Inspector
General's decision to undertake an investigation of
potential fraud or abuse by recipients of Medicare
funds is final agency action subject to judicial
review prior to any enforcement action.
In the Supreme Court of the
United States, No. 03-1339, UNIVERSITY OF MEDICINE
AND DENTISTRY OF NEW JERSEY, ET AL., PETITIONERS v.
DARA CORRIGAN, ACTING INSPECTOR GENERAL, DEPARTMENT
OF HEALTH AND HUMAN SERVICES ON PETITION FOR A WRIT
OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
BRIEF FOR THE RESPONDENT IN
OPPOSITION
OPINIONS BELOW
The opinion of the court of
appeals (Pet. App. 1a-32a) is reported at 347 F.3d
57. The opinion of the district court (Pet. App.
35a-69a) is not reported.
JURISDICTION
The judgment of the court of
appeals was entered on October 17, 2003. A petition
for rehearing was denied on December 18, 2003 (Pet.
App. 70a-71a). A petition for a writ of certiorari
was filed on March 16, 2004. The jurisdiction of
this Court is invoked under 28 U.S.C. 1254(1).
STATEMENT
1. a. Title XVIII of the Social
Security Act (Medicare Act), 42 U.S.C. 1395 et seq.,
establishes a federally subsidized health insurance
program primarily for persons over age 65. The
program is administered by the Centers for Medicare
and Medicaid Services (CMS), previously known as the
Health Care Financing Administration (HCFA), within
the Department of Health and Human Services (HHS).
CMS, in turn, contracts with insurance companies
throughout the nation, called carriers, which are
responsible for communicating Medicare policy in the
locale they serve, processing and paying claims, and
conducting post-payment audits. The Medicare program
has two principal parts. This case relates to
circumstances in which these two parts overlap,
presenting a risk that Medicare providers will bill
the program twice for the same services.
Part A of Medicare, 42 U.S.C.
1395c-1395i, provides insurance for the costs of
institutional care. Part A payments contribute to
the costs of training residents and interns,
including their salaries and the salaries of
teaching physicians. 42 U.S.C. 1395ww(d) and (h). In
1996, Medicare Part A paid over $8 billion to
teaching hospitals for the costs of training their
residents and interns, or approximately $100,000 per
resident or intern. C.A. App. A309.
Part B of Medicare, 42 U.S.C.
1395j-1395w, provides insurance to reimburse for
specific medical services provided to a patient.
Because Medicare already contributes to teaching
supervision through Part A, teaching physicians may
not seek reimbursement under Part B for merely
providing general supervision to residents. Rather,
in order to receive compensation under Part B, a
teaching physician must "render[] sufficient
personal and identifiable physicians' services to
the patient to exercise full, personal control over
the management of the portion of the case for which
the payment is sought." 42 U.S.C. 1395u(b)(7)(A)(i)(I).
During the time period covered by
the audits here at issue, the Secretary's
regulations authorized payment under Medicare Part B
only where the teaching physician both was the
"attending physician" and "furnishe[d] personal and
identifiable direction to interns or residents who [we]re
participating in the care of the patient." 42 C.F.R.
405.521(b)(1) (1993). The Secretary interpreted that
regulation, together with a general requirement that
Medicare will pay only where "[t]he services are
personally furnished for an individual patient by a
physician," 42 C.F.R. 405.550(b)(1), to require that
the teaching physician must at least be physically
present at the time the services were performed in
order to be eligible for payment under Part B. See,
e.g., Centers for Medicare & Medicaid Services, HHS,
Carriers Manual § 8201(A) (visited May 19, 2004)
<http://www.cms. hhs.gov/manuals/14_car/3b8201.asp>
(if teaching physician did not personally perform
the service, medical record should indicate that the
"physician was physically present when the service"
was rendered).1
b. Congress enacted the Inspector
General Act (the IG Act), 5 U.S.C. App. 1 et seq.,
at 12, in 1978 in order to curb "fraud, abuse and
waste in the operations of Federal departments and
agencies and in federally-funded programs." S. Rep.
No. 1071, 95th Cong., 2d Sess. 4 (1978). The IG Act
created an Office of Inspector General (OIG) for
numerous agencies, into which Congress consolidated
various audit and investigation responsibilities,
see 5 U.S.C. App. 2(1), 3(a), 9(a), at 12, 13, 32.
In the case of HHS (then the Department of Health,
Education, and Welfare), Congress had previously
created an Inspector General (IG), with
responsibilities and powers similar to those
conferred by the IG Act. Act of Oct. 15, 1976, Pub.
L. No. 94-505, Tit. II, 90 Stat. 2429. The IG Act,
as amended by Pub. L. 100-504, transferred that
pre-existing office to a new HHS OIG. 5 U.S.C. App.
9(a)(1)(F), at 32.
Sections 4 and 6 of the IG Act
vest the IG with broad authority to "conduct,
supervise, and coordinate audits and investigations
relating to [HHS] programs," such as Medicare, 5
U.S.C. App. 4(a)(1), at 15, as well as to conduct
activities designed to "promot[e] economy and
efficiency" and "prevent[] and detect[] fraud and
abuse" in the agency's "programs and operations," 5
U.S.C. App. 4(a)(3), at 15. See also 5 U.S.C. App.
2(1) and (2), at 12 (same). The IG enjoys broad
discretion "to make such investigations * * *
relating to the administration of the programs and
operations of [HHS] as are, in the judgment of the
Inspector General, necessary or desirable." 5 U.S.C.
6(a)(2), at 19.
c. In 1996, an audit by the HHS
OIG of the University of Pennsylvania Health System
revealed a dramatic lack of documentation that
teaching physicians were physically present during
services for which Medicare had been billed and,
further, that Medicare was being billed for a more
complex level of care than was actually provided.
The University of Pennsylvania audit resulted in a
$30 million settlement. Pet. App. 7a. In light of
that audit, the HHS OIG developed the Physician at
Teaching Hospital (PATH) initiative to focus on the
two forms of potential over-billing discovered at
the University of Pennsylvania. Id. at 8a. PATH
audits are conducted by HHS-OIG at its own cost.
Alternatively, if a provider so chooses and OIG
agrees, the provider may hire an independent
reviewer to conduct a "self-audit" and report the
findings to the HHS OIG. Ibid.
In 1996, the HHS OIG informed
petitioners and other teaching hospitals of its
intent to conduct a PATH audit of their Medicare
reimbursements. After certain providers objected
that the Secretary and his carriers had not
sufficiently made clear the "physical presence"
requirement for teaching physicians, the HHS OIG
conducted a broad review of the guidance that the
agency and carriers had provided on the subject.
Pet. App. 7a-8a. The HHS OIG found that the
Secretary and the "overwhelming majority" of
regional carriers had "consistently * * * read [the
regulatory language] to require the attending
physician's physical presence when a resident
performed a service," in order to qualify for Part B
reimbursement. C.A. App. A322. The HHS OIG
acknowledged, however, that "some carriers did not
enforce a 'physical presence' standard." Ibid. The
HHS OIG therefore announced that it would undertake
PATH audits "only where carriers * * * issued clear
explanation[s] of the rules regarding reimbursement
for the services of teaching physicians." Id. at
A323.
In response to the teaching
hospitals' objections, HHS's General Counsel,
Harriet Rabb, also reviewed the issue of Part B
payments to teaching physicians. On the same day
that the HHS OIG issued its PATH Overview, the
General Counsel sent a letter to the Association of
American Medical Colleges and the American Medical
Association (the Rabb Letter), responding to their
concerns. The letter endorsed the approach adopted
by the HHS OIG-to investigate those providers whose
carriers had provided clear instruction of the
physical presence requirement. Pet. App. 9a.
The Rabb Letter first observed
that no physician could reasonably have believed he
could be compensated under Medicare Part B for a
merely supervisory role. "It would be absurd to
assert that physicians could receive the significant
remuneration that characterizes Part B reimbursement
for supplying the same level of services that
qualifies and was paid for as Part A services." Pet.
App. 109a. The Rabb Letter noted several HCFA
publications that had specifically referred to the
physical presence requirement, but recognized that
the standard had been stated in various ways. Id. at
110a-112a. In the General Counsel's view, because
HCFA's own guidance was "not unambiguously clear,"
providers would have had to look to the carriers for
clarification, and "that guidance would be
controlling." Id. at 113a. "[I]ndeed," the General
Counsel observed, "carriers across the country did
provide very clear guidance on this subject," and
she quoted several that stated the "physician's
presence" requirement quite explicitly. Ibid. The
Rabb Letter further stated the General Counsel's
agreement with the HHS OIG's decision only to
undertake PATH audits where the carrier had adopted
a clear position that the treating physician's
physical presence was required. Id. at 115a.
The HHS OIG has informed this
Office that, pursuant to the PATH initiative, it has
undertaken audits of 32 teaching hospitals. Of those
audits, 29 have been completed. The HHS OIG has also
informed this Office that PATH audits have recovered
nearly $130 million for the Medicare program, in
addition to another roughly $100 million recovered
in non-PATH audits that encompassed PATH-related
issues.
d. In 1997, the HHS OIG reviewed
the written policies of petitioners' Medicare
carrier and determined that they showed a clear
policy of requiring a teaching physician's physical
presence as a condition for reimbursement under
Medicare Part B. See, e.g., C.A. App. A285 ("The
supervising physician * * * should personally
provide all services reported for Medicare Part B
payment or be present when the resident renders the
services.") (emphases added). The HHS OIG also
determined that petitioners had adequate notice of
the carrier's interpretation through manuals that
directed the providers to the appropriate
publication for guidance concerning Part B payments
to teaching physicians. Ibid.
Petitioners initially agreed to
cooperate with the PATH audits and voluntarily
elected to employ an independent auditor, rather
than having the HHS OIG conduct the audit directly.
Instead of going forward with the audits, however,
petitioners filed this action, challenging the
audits. The HHS OIG subsequently issued
administrative subpoenas to petitioners to produce
the necessary documents, and counter-claimed to
enforce the subpoenas. Pet. App. 11a.
2. The district court dismissed
petitioners' suit and granted the government's
motion for enforcement of the subpoenas. Pet. App.
39a-69a. The district held that petitioners'
challenge to the HHS OIG's audit failed to satisfy
at least three separate requirements for review
under the Administrative Procedure Act (APA), 5
U.S.C. 551 et seq. First, the IG's decision to
initiate an audit was neither "final agency action"
nor ripe for review, because it was merely the
beginning of an investigation without immediate
impact on petitioners' day-to-day operations. Pet.
App. 52a-53a, 56a-57a. Further, petitioners had an
adequate alternative remedy because any challenge to
the IG's interpretation of the Medicare regulations
could be raised in defense against any enforcement
action, if one were ever brought. Id. at 54a-55a.
Finally, the IG Act committed the decision whether
to perform an audit to the HHS OIG's sole
discretion. Id. at 55a-56a. In granting the
government's motion to enforce the administrative
subpoenas, the court found that the investigation
was within the authority conferred on the IG by
Section 6(a)(2) of the IG Act. Id. at 56a, 64a-68a.
3. The court of appeals affirmed.
Pet. App. 1a-32a. The court held, as petitioners
conceded, that the HHS OIG's statutory charge "to
prevent and detect fraud and abuse" in the Medicare
program encompassed the authority to audit not only
the agency's own operations, but also to audit
directly the recipients of Medicare funds. Id. at
17a. The court rejected petitioners' attempt to
circumscribe that authority to instances where "the
inspector general has received a referral from a
carrier, or is otherwise responding to a specific
allegation of fraud." Ibid. The court held that "[t]he
inspector general's mandate to prevent and detect
fraud and abuse is not limited by HHS's-or its
agents' -own efforts to prevent and detect fraud and
abuse." Id. at 19a.
The court further held that it
lacked jurisdiction over petitioners' challenge to
the standard that the IG intended to use in her
audit. Two members of the panel held, following FTC
v. Standard Oil Co., 449 U.S. 232 (1980), that the
IG's decision to conduct an investigation and to
utilize a particular standard in her audit was not
sufficiently ripe or final for judicial review. The
court recognized that the decision to initiate an
investigation is "a preliminary step-non-final by
definition-leading toward the possibility of a
'final action' in the form of
an enforcement" that may never
materialize. Pet. App. 24a. In response to
petitioners' reliance on the immediate need to
comply with the IG's audit requests, the court
observed that "[a]lthough this burden certainly is
substantial, it is different in kind and legal
effect from the burdens attending what heretofore
has been considered to be a final action." Id. at
28a (quoting Standard Oil, 449 U.S. at 242).
Judge Ambro concurred. Pet. App.
31a-32a. He declined to join the majority's analysis
concerning finality but viewed the IG's decision to
undertake an audit as unreviewable because it was
"committed to agency discretion," 5 U.S.C.
701(a)(2), by Section 6(a)(2) of the IG Act, which
authorizes the IG "to make such investigations * * *
relating to the administration of the programs and
operations of [HHS] as are, in the judgment of the [IG]
necessary or desirable." Pet. App. 32a.
ARGUMENT
The decision of the court of
appeals is correct and does not conflict with any
decision of this Court or any other court of
appeals. Accordingly, the petition for a writ of
certiorari should be denied.
1. a. Petitioners argue that the
HHS OIG may audit Medicare providers only when there
has been a fraud referral from a carrier. Pet.
11-24. That contention lacks merit. The IG Act
provides that the inspector general is "to provide
leadership * * * for activities designed * * * to
promote economy, efficiency, and effectiveness * * *
and * * * to prevent and detect fraud and abuse" in
her agency's programs. 5 U.S.C. App. 2(2), at 12.
See also 5 U.S.C. App. 4(a)(3), at 15 ("It shall be
the duty and responsibility of each Inspector
General * * * to conduct, supervise, or coordinate *
* * for the purpose of promoting economy and
efficiency in the administration of, or preventing
and detecting fraud and abuse in [the agency's]
programs."). The IG Act thus assigns to the
inspectors general an active and leading role in
combating fraud, waste and abuse, and, more
generally, in promoting economy and efficiency in
their respective agency's programs. In fulfilling
that mission, an inspector general must exercise
independent initiative to investigate possible fraud
and abuse, rather than wait for other offices or
individuals to bring such accusations to her. The
statute's use of the verbs "prevent" and "detect"
also necessarily signify authority to investigate
potential fraud or abuse even when the IG has no
specific evidence that fraud or abuse has occurred.
The court of appeals correctly held that Congress
did not restrict the IG to acting only when another
office or individual had discovered evidence of
fraud.
Petitioners also argue (Pet.
11-24) that the HHS OIG's PATH audits are unlawful
because HHS's carriers audit providers to ensure
that reimbursement complies with the Medicare Act,
and Section 9(a)(2) of the IG Act prohibits the IG
from exercising agency "program operating
responsibilities." Nothing in that Section, however,
precludes the IG from exercising her mandated
functions whenever her investigatory authority
overlaps with that of the carrier.
Section 9(a)(1) immediately
transferred into the newly-created inspector general
offices numerous pre-existing investigative offices.
5 U.S.C. App. 9(a)(1), at 32. Section 9(a)(2), in
turn, provides that "[t]here shall be transferred *
* * to the office of Inspector General * * * such
other offices or agencies, or functions, powers, or
duties thereof, as the head of the establishment
involved may determine are properly related to the
functions of the Office * * *, except that there
shall not be transferred to an Inspector General
under paragraph (2) program operating
responsibilities." 5 U.S.C. App. 9(a)(2), at 32-33.
As is clear from the plain text, Section 9(a)(2)'s
reference to "program operating responsibilities"
imposes a limit only on the agency head's ability to
"transfer[] to an Inspector General under paragraph
(2)" additional offices or functions beyond those
already conferred by Congress. 5 U.S.C. App.
9(a)(2), at 33. It is inconceivable that Congress,
which created the OIG precisely because of the
failure of agencies to combat fraud and abuse
effectively, would then make the IG's authority to
investigate waste depend upon the agency's own
ability to detect it.
The PATH initiative is undertaken
pursuant to HHS OIG's independent authority to
detect and prevent fraud. The carriers have not
relinquished their powers to conduct routine
compliance audits, nor has the Secretary transferred
that function to the IG.
The 1989 Opinion of the Office of
Legal Counsel (OLC) upon which petitioners rely,
Pet. 13-14 (citing 13 Op. Off. Legal Counsel 54
(1989)), explicitly disclaims any application to
investigations such as the PATH audits. The OLC
opinion both begins and concludes by stressing that
"[t]he significant investigat[ory] authority granted
to Inspectors General * * * includes the authority
to investigate recipients of federal funds * * * to
determine if they are complying with federal laws
and regulations." 13 Off. Legal Counsel at 54; id.
at 66 (same). OLC expressly limited its opinion to
"investigations pursuant to statutes that provide
the Department with regulatory jurisdiction over
private individuals and entities that do not receive
federal funds," id. at 54 (emphasis added), such as
the Fair Labor Standards Act of 1938 and
Occupational Safety and Health Act of 1970, "which
impose restrictions on individuals and entities * *
* who are not * * * recipients of federal funds
distributed by the Department," id. at 55-56. In
fact, the OLC opinion specifically defined the term
"regulatory investigation"-a phrase petitioners
attempt to invoke here-as "investigations [that]
generally have as their objective regulatory
compliance by private parties," as distinguished
from investigations aimed at eliminating "waste and
fraud among * * * recipients of federal funds." Id.
at 54 n.1.
The legislative history of the IG
Act also is fully consistent with the court of
appeals' decision. Petitioners cite a House Report
that states that the IGs will not have direct
responsibility for conducting audits such as those
"conducted by USDA's Packers and Stockyards
Administration in the course of its regulation of
livestock marketing" or Department of Labor
investigations aimed at "enforcing the Fair Labor
Standards Act." Pet. 4 (quoting H.R. Rep. No. 584,
95th Cong., 1st Sess. 12-13 (1977)). The salient
characteristic of those two examples is that they,
like the investigations discussed in the OLC
opinion, concern the enforcement of regulatory
schemes that, unlike benefit programs, do not
involve the potential for "waste of federal funds."
See 13 Op. Off. Legal Counsel at 60-61 (discussing
House Report).
Moreover, the legislative history
of the IG Act specifically endorses the kind of
investigative initiative undertaken by the HHS OIG
here. The Senate Report commended the HEW Inspector
General's "Project Integrity," in which the IG "spearhead[ed]
a nationwide effort to deal systematically with
Medicaid fraud." S. Rep. No. 1071, supra, at 8.
"Using computer screening to identify doctors and
pharmacists performing services which appeared
unusual when compared with certain norms," the IG
had identified over 1000 cases warranting criminal
or administrative action. Ibid. That initiative,
which Congress held up as an example, is
indistinguishable in salient respects from the
present PATH audits.
b. Petitioners also argue that
the court of appeals' decision conflicts with
Burlington Northern Railroad Co. v. Office of
Inspector General, Railroad Retirement Board, 983
F.2d 631 (5th Cir. 1993), and Truckers United for
Safety v. Mead, 251 F.3d 183 (D.C. Cir. 2001). Pet.
17-24. That is not correct.
Burlington Northern did not
endorse petitioners' construction of the IG Act. As
the Fifth Circuit explained in the subsequent case
of Winters Ranch Partnership v. Viadero, 123 F.3d
327 (1997), Burlington Northern held only that an
agency may not "relinquish its own performance of
[a] function" such that there is an effective
"transfer of function" that would be precluded by
Section 9(a)(2). Id. at 334-335 (explaining that, in
Burlington Northern, the Railroad Retirement Board
had "never exercised its statutory duty" to
investigate railroad companies' payment of taxes to
an employee insurance account, and the IG "assumed
the agency's primary duty" in its place, including
adopting a plan to "conduct[] regular tax collection
audits of substantially all major railroads on a
continuing long-term basis"); accord United States
v. Chevron U.S.A., Inc., 186 F.3d 644, 648 (5th Cir.
1999) (Burlington Northern inapplicable where agency
"continues to keep the relevant records" and
"subpoenas do not displace any agency
responsibilities").
Petitioners do not suggest that
the Medicare carriers have "relinquish[ed their] own
performance of [the audit] function." Winters Ranch,
123 F.3d at 334. Nor could they. The carriers
continue to have primary responsibility for ensuring
that Medicare providers are entitled to the
reimbursement they claim. The PATH initiative covers
only a specified period of time in the past, is
directed at a small subset of providers (teaching
hospitals), and focuses only on two discreet issues
that the HHS OIG has reason to believe were
susceptible to large-scale fraud and abuse.
The D.C. Circuit's decision in
Truckers United for Safety is similarly inapposite.
There, the IG was engaged in a joint program with
the Office of Motor Carriers within the Department
of Transportation "to create a greater deterrence to
motor carrier violations of * * * Safety
Regulations." 251 F.3d at 187. The target companies
received no federal funds, and the IG was not
"engaged in an investigation relating to abuse" of
DOT's programs. Id. at 189. Like the safety
investigations at issue in the 1989 OLC opinion, the
DOT IG's investigation was merely "to determine
whether individual trucking companies were complying
with federal motor carrier safety regulations."
Ibid. Truckers United has no application to the
investigation of fraud and abuse by recipients of
federal Medicare funds.2
2. Petitioners also argue that
the court of appeals erred in concluding that the
IG's interpretation of the Medicare Act and
regulations as requiring physical presence of an
attending physician was not subject to judicial
review at this time. Pet. 24-29. That contention
also lacks merit.
One of several "prerequisite[s]"
for judicial review under the APA is that the
challenged conduct constitute "final agency action."
Dalton v. Specter, 511 U.S. 462, 469 (1994); 5 U.S.C.
704. "[T]he action must mark the 'consummation' of
the agency's decisionmaking process-it must not be
of a merely tentative or interlocutory nature"-and
"must be one by which 'rights or obligations have
been determined,' or from which 'legal consequences
will flow.'" Bennett v. Spear, 520 U.S. 154, 177-178
(1997) (citations omitted).
In Standard Oil, supra, the Court
held that the FTC's issuance of an administrative
complaint, which alleged that the Commission had
"reason to believe" that the respondents were
engaged in unfair trade practices, was not "final
agency action." 449 U.S. at 234, 238. The decision
to investigate served only to initiate the matter;
it was not a definitive ruling, and had no legal
force or practical effect on Standard Oil's
day-to-day operations other than the costs and
disruptions of the proceeding, which were similar to
those that accompany any major litigation. Id. at
241-242.
Based on those same
considerations, the court of appeals correctly held
that the HHS OIG's decision to undertake a PATH
audit is not final agency action. Pet. App. 23a-29a.
Moreover, in this case, unlike in Standard Oil, the
IG's decision to undertake a PATH audit does not
even amount to a threshold determination of "reason
to believe" that petitioners are in violation of
Medicare law, let alone any definitive determination
of petitioners' liability. Indeed, it is still quite
uncertain whether any enforcement action will be
taken against petitioners. In the past, in a third
of the then-completed PATH audits, "no enforcement
action was taken." C.A. App. A251-A252; Physicians
at Teaching Hospitals (PATH) Audits: Hearing Before
a Subcomm. of the Senate Comm. on Appropriations,
105th Cong., 1st Sess. 396 (1998) (PATH reviews have
been terminated at institutions where few errors
have been identified during audits).
The IG's initiation of an audit
does not determine any rights or obligations or have
legal consequences for petitioners' primary conduct
or day-to-day operations. "[A]n administrative
investigation adjudicates no legal rights." SEC v.
Jerry T. O'Brien, Inc., 467 U.S. 735, 742 (1984).
Even assuming that the IG refers petitioners for
proceedings to assess administrative penalties or
commencement of a False Claims Act case, petitioners
will have ample opportunity to raise all their
arguments as defenses to an enforcement action. "[T]he
extent to which the respondent may challenge the
complaint and its charges proves that the averment
of reason to believe is not 'definitive' in a
comparable manner to the regulations in Abbott
Laboratories [v. Gardner, 387 U.S. 136 (1967)]."
Standard Oil, 449 U.S. at 241.
The court of appeals' decision
also is consistent with the decisions of other
courts that have dismissed pre- investigation
challenges to the PATH initiative on ripeness and
finality grounds. Association of Am. Med. Colls. (AAMC)
v. United States, 217 F.3d 770, 781 (9th Cir. 2000);
Temple Univ. v. Brown, No. 00-CV-1063, 2001 WL
185535 (E.D. Pa. Feb. 23, 2001), aff'd sub nom.
Temple Univ. v. Rehnquist, No. 01-3862, 2002 WL
31012237 (3d Cir. Aug. 20, 2002) (46 Fed. Appx. 124)
(not precedential); Greater N.Y. Hosp. Ass'n v.
United States, No. 98 Civ. 2741 (RLC), 1999 WL
1021561, at *5-*7 (S.D.N.Y. Nov. 9, 1999). As the
Ninth Circuit succinctly stated, "[a]n
investigation, even one conducted with an eye to
enforcement, is quintessentially non-final as a form
of agency action." AAMC, 217 F.3d at 781.
Abbott Laboratories, upon which
petitioners rely (Pet. 24-26), is not to the
contrary. That decision involved final agency action
in the form of formally issued regulations that
forced drug manufacturers to risk serious penalties
for noncompliance, or undertake costly changes in
labeling and advertising materials. See Standard
Oil, 449 U.S. at 242. Petitioners make no claim that
the HHS OIG's decision to undertake a PATH audit,
which focuses exclusively on past conduct (billings
prior to 1996), has any impact on petitioners'
present or future primary conduct. Petitioners are
simply required to cooperate with the audit, an
entirely reasonable aspect of participating in
receiving large amounts of federal funds under the
vast Medicare program. Standard Oil makes clear that
the initiation of an investigation-even one in which
the cost and burden of responding is
"substantial"-does not qualify as the kind of
immediate impact on day-to-day activities that will
satisfy the Abbott Laboratories finality
requirement. See id. at 243 (such costs are no more
"than the disruptions that accompany any major
litigation"). "[T]he expense and annoyance of
litigation is part of the social burden of living
under government." Id. at 244. Finally, even if the
HHS OIG's initiation of the investigation
constituted final agency action, neither that
initiation nor the IG's interpretation of the
Medicare Act and regulations would be ripe for
judicial review at this stage. See, e.g., Ohio
Forestry Ass'n v. Sierra Club, 523 U.S. 726, 732-737
(1998).3
b. Even if the IG's determination
of how to conduct her investigation constituted
final agency action and were ripe for review, the
decision whether and how to investigate recipients
of Medicare payments is one "committed to agency
discretion by law," 5 U.S.C. 701(a)(2), and
therefore not subject to judicial review. Pet. App.
32a (Ambro, J., concurring); Webster v. Doe, 486
U.S. 592, 599-600 (1988).
The IG Act confers on the IG
authority "to make such investigations and reports
relating to the administration of the programs and
operations of [HHS] as are, in the judgment of the
Inspector General, necessary or desirable." 5 U.S.C.
App. 6(a)(2), at 19 (emphasis added). See NASA v.
FLRA, 527 U.S. 229, 239 (1999) (Section 6(a)(2)
confers "discretion" on the Inspectors General in
the conduct of their investigations).
The language of Section 6(a)(2)
is similar to the grant of discretion that barred
APA review in Webster, supra. See 486 U.S. at 600
(statutory language authorizing the Director of
Central Intelligence to terminate an employee
"whenever the Director 'shall deem such termination
necessary or advisable in the interests of the
United States,'" foreclosed APA review). Section
6(a)(2) of the IG Act similarly reflects Congress's
intent to foreclose review. Other provisions of the
Act reinforce that conclusion. See, e.g., 5 U.S.C.
App. 3(a), at 13 (prohibiting agency head from
interfering with IG audit, investigation, or
subpoena), 5 U.S.C. App. 6(a)(4), at 19 (granting IG
broad subpoena power to obtain evidence "necessary
in the performance of the [IG's] functions").
CONCLUSION
The petition for a writ of
certiorari should be denied.
Respectfully submitted.
THEODORE B. OLSON Solicitor
General PETER D. KEISLER Assistant Attorney General
MICHAEL S. RAAB DOUGLAS HALLWARD-DRIEMEIER Attorneys
MAY 2004
1 The Secretary revised the
regulations effective July 1, 1996. The current
regulation eliminates the "attending physician"
requirement, but carries forward and makes explicit
in the text of the regulations themselves the
requirement that "services * * * furnished by a
resident [must be performed] in the presence of a
teaching physician." 42 C.F.R. 415.170 (2002).
2 It also is not clear that
Truckers United remains good law on its own facts.
Congress subsequently enacted legislation to clarify
that the DOT IG can investigate any fraud on the
agency by an entity regulated by DOT. Act of Oct. 9,
1999, Pub. L. No. 106-69, 113 Stat. 1013; Motor
Carrier Safety Improvement Act of 1999, Pub. L. No.
106-159, § 228(a) and (b), 113 Stat. 1773. The D.C.
Circuit declined to address whether the DOT IG
could, in the future, undertake similar
investigations in light of this new statutory
authority. Truckers United, 251 F.3d at 191-192.
3 Petitioners also err in
asserting (Pet. 27) a conflict between the court of
appeals' decision and the D.C. Circuit's decisions
in General Electric Co. v. EPA, 290 F.3d 377 (2002),
and Mountain States Tel. & Tel. Co. v. FCC, 939 F.2d
1035 (1991). Those decisions did not involve
instigation of an IG audit but simply permitted
judicial review when a regulated entity was required
to comply with a new regulation adopted by the
agency. General Elec., 290 F.3d at 381-382 (review
of EPA Guidance Document that "purports on its face
to bind both applicants and the Agency" with respect
to clean up and disposal of PCB waste); Mountain
States, 939 F.2d at 1038-1039 (review of "new
accounting rules" adopted by the FCC after notice
and comment). Moreover, in each case, the D.C.
Circuit noted that the relevant judicial review
provisions required petitioners to seek judicial
review within sixty days of the new rule's adoption.
See General Elec., 290 F.3d at 381 (Toxic Substances
Control Act, 15 U.S.C. 2618(a)(1)(A)); Mountain
States, 939 F.2d at 1040 (Hobbs Act, 28 U.S.C.
2344).
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